Strata Management Act 2013 · Act 757
After handover,
who runs the building?
In a strata building, management passes step by step from the developer to the owners themselves. Here are the three stages the Act sets out; at every stage, the sinking fund is 10% of the maintenance fees.
- 01The developer’s management periodIf no Management Corporation (MC) exists at handover, the developer manages the building from the first unit’s handover until one month after the Joint Management Body (JMB) is formed (section 7).
- 02Joint Management Body (JMB)Formed at its first annual general meeting, which the developer must convene within 12 months of the first unit’s handover (sections 17(1)(b) and 18(1)).
- 03Management Corporation (MC)Comes into being by law once the strata titles are issued and the strata register is opened. When owners other than the developer hold a quarter of the share units, the developer must convene the MC’s first annual general meeting within one month; the JMB dissolves three months later (sections 27 and 57).
The short answer
When you buy a strata home, the SPA must state whether the land is freehold or leasehold (with the lease term and expiry date for leasehold land), and a new-home advertisement must also give the tenure, the lease period, the expiry date and any restriction in interest. The title itself also records the land-use category, the express conditions and the restrictions in interest. After handover, the developer manages the building before it passes to the Joint Management Body (JMB) and then the Management Corporation (MC); under the Strata Management Act 2013, the sinking fund is 10% of the maintenance fees. In Kuala Lumpur, assessment tax on a residential building is 4% of its annual value; commercial buildings pay a higher rate.
- Sinking fund
- 10%of the maintenance fees (section 12(4))
- JMB formed within
- 12months of the first unit’s handover
- KL assessment tax (residential building)
- 4% of the annual value
Compiled by Kevin LeeUpdated
Freehold and leasehold
The preamble of the standard strata SPA states whether the land is freehold or “leasehold land of so many years expiring on” a given date, with the title number and the bank the land is charged to, if any. The National Housing Department’s 2025 guideline also requires a new-home advertisement to state the tenure; for leasehold land, it must give the lease period, the expiry date and the restriction in interest, and show the restriction clearly.
The principal land law in Peninsular Malaysia is the National Land Code; the current revised edition is the National Land Code (Revised 2020), Act 828.
Sources: P.U.(A) 106/2015: amendment to the Housing Development (Control and Licensing) Regulations 1989 (housing ministry copy) (2015-07-01); National Housing Department: guideline on advertising and sales permit applications (2025-02-20); Department of Director General of Lands and Mines (JKPTG): National Land Code (2026-10-11)
What does the title record?
- The category of land use (Kategori Kegunaan Tanah)
- Express conditions (Syarat Nyata)
- Restriction in interest (Sekatan Kepentingan)
- The land’s status, freehold or leasehold, and the lease period
The same guideline distinguishes two kinds of sale: a sale of the property, where the title passes to the buyer, and a sale of a lease term, where the buyer is only registered as lessee and the land itself is not transferred. The developer must declare which applies.
Sources: National Housing Department: guideline on developer’s licence applications (2025-02-20); National Housing Department: guideline on advertising and sales permit applications (2025-02-20)
Residential or commercial: the difference in KL assessment tax
“Leasehold” (as against freehold) is about your interest in the land and when it ends; “residential” or “commercial” is about the category of use. They are two different things. One direct effect of the category is DBKL’s assessment tax, which is the annual value multiplied by the rate.
| Category | Within the 36 sq mi area | Outside it |
|---|---|---|
| Residential building | 4% | 4% |
| Serviced apartment | 7% | 5% |
| Commercial building | 10% | 8% |
Sources: DBKL: Valuation and Property Management Department (Commissioner of Buildings and assessment tax)
After handover: strata management
The Strata Management Act 2013 replaced the old Building and Common Property (Maintenance and Management) Act 2007. In Kuala Lumpur it is administered by DBKL’s Commissioner of Buildings (COB), who oversees strata management, advises JMBs and MCs, mediates and handles complaints.
- Maintenance fees are set in proportion to each unit’s share units; the sinking fund is 10% of the fees (section 12(4); a JMB may not set it below 10%, section 25(4)).
- Payment is due within 14 days of notice; arrears carry interest at 10% a year, calculated daily (section 12(5)–(6)).
- An owner who disputes the amount may ask the Commissioner of Buildings to review it (section 12(7)).
Sources: Act 757: Strata Management Act 2013 (housing ministry copy); DBKL: Valuation and Property Management Department (Commissioner of Buildings and assessment tax)
Charges and transfer
Once the SPA is signed, the developer may not charge the land without the buyer’s written consent. If the land is already charged to a bank, the developer must provide the redemption statement and the bank’s undertaking letter, and progress payments go first to redeem the unit. Before handover, the unit must be free of every encumbrance.
If transferring the unit needs the consent of the relevant authority, the standard SPA puts the cost of applying on the developer. In Kuala Lumpur, applications for consent to transfer or to charge can be made through the Consent Online system of the Department of Director General of Lands and Mines (JKPTG).
Sources: P.U.(A) 106/2015: amendment to the Housing Development (Control and Licensing) Regulations 1989 (housing ministry copy) (2015-07-01); JKPTG: Consent Online; JKPTG: Strata Titles Act 1985
Talk
A question about the title?
Kevin can go through the tenure details in the SPA and the advertisement with you, item by item; for legal advice, see a lawyer.
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KEVIN LEE李明伟
13 years in real estateSenior Property AdvisorREN 14973
Affiliated agency: FLP REALTY SDN. BHD.
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